Brent crude futures fell, posting a third consecutive loss, as increasing talk from consumer nations about a possible strategic oil reserves release and rising US crude oil inventories prompted end-of-quarter selling.
Brent May crude fell $1.77, or 1.43 percent, to settle at $122.39 a barrel, having traded from $121.37 to $124.64.
“The talk of a possible strategic oil reserve release by the US and EU is another big effort to talk prices down,” said David Morrison, a market analyst at financial services company GFT, adding that the downward effect of last year’s emergency release had only been temporary.
New US claims for jobless benefits fell only slightly last week, according to the Labor Department, missing forecasts for a greater decline, while the prior week’s number was revised up. Some investors said the jobs numbers showed worrisome signs that the economic recovery may be stalling, after a period of improvement.
Initial claims for state unemployment benefits fell 5,000 to a seasonally adjusted 359,000, the lowest level since April 2008. Separately, a report on the Commerce Department’s final estimate of gross domestic product showed that the economy expanded 3 percent in the fourth quarter, as expected.
“The data today is evidence that we’re not going to have the robust recovery we had been expecting. The economy is growing, and the labor market is healing, but both on a very slow basis,” said Michael Yoshikami, chief executive officer at Destination Wealth Management in Walnut Creek, California.
Investors shrugged off data that showed US household income grew at a faster pace in the fourth quarter than previously thought, which should help underpin spending this quarter.
The Dow Jones industrial average was down 60.54 points, or 0.46 percent, at 13,065.67. The Standard & Poor’s 500 Index was down 11.15 points, or 0.79 percent, at 1,394.39. The Nasdaq Composite Index was down 29.01 points, or 0.93 percent, at 3,075.95.
European shares extended declines amid continued growth concerns and as technical pressure weighed on several major indexes.
The FTSEurofirst 300 index of leading European shares closed down 1.2 percent to at 1,059.21, while the Euro STOXX 50 was down 1.8 percent.
US government debt prices rose, with benchmark yields hovering at two-week lows, after the jobless data undercut optimism that the employment picture was gaining traction.
Nagging jitters about the euro zone’s fiscal woes and a perception that the Federal Reserve might consider more stimulus to help the US economy also revived bids ahead of a $29 billion auction of seven-year notes.
The benchmark 10-year US Treasury note was up 12/32 in price to yield 2.16 percent.
The euro slid against the dollar and the yen as investors, nervous about Spain’s budget presentation o n Friday, dumped the single currency amid persisting concerns about the euro zone’s sovereign debt crisis.
The single currency has declined steadily in recent sessions after touching a near four-week high earlier this week on comments from US Federal Reserve Chairman Ben Bernanke, who indicated supportive monetary policy will remain in place.
The dollar fell 0.7 percent to 82.31 yen, according to Reuters data. The euro tumbled 1.0 percent to 109.25 yen, and against the dollar, the single currency fell 0.3 percent to $1.3273.
Oil prices slipped below $123 a barrel as signs of slowing global economic growth and the prospect of a release of strategic oil reserves in the West overshadowed concerns about a loss of Iranian oil.
Spot gold prices fell $8.60 to $1,652.90 an ounce.
